Oil prices in Asia traded on May 3 fell due to concerns about demand from China

In the trading session on May 3, oil prices in the Asian market fell about 1% in the context of investors worried that demand for oil will shrink as China continues to prolong the blockade measures to prevent the epidemic. COVID-19.

Specifically, the price of North Sea Brent oil for delivery futures fell by 1.3 USD (equivalent to 1.2%) to 106.28 USD/barrel at 4:42 pm (Vietnam time) and the price of US light sweet crude oil (US light sweet crude oil) WTI) also fell 90 US cents (0.9%) to $104.27 a barrel.

European countries are discussing the possibility of imposing an embargo on Russian oil, and this is expected to push world oil prices higher due to tight supply. However, concerns about falling oil demand in the background economy the world’s second largest oil price has outweighed the positive effects on this oil price.

The Chinese capital Beijing has recorded dozens of new infections a day and is ramping up testing and tracing to prevent the risk of imposing a city-wide blockade, as was the case in Shanghai over the past month. . Restaurants in Beijing do not serve on-site dining and some apartment buildings have been locked down.

Commodity market analyst Vivek Dhar of Commonwealth Bank commented that the positive driver of oil prices today is the European Union (EU) oil embargo and the market is waiting to see this decision. Is it released or not? Meanwhile, China’s Zero COVID (No COVID) campaign continues to exert downward pressure on the “black gold”. Both are very important factors.

Oil prices have surged to multi-year highs, with Brent hitting $139 in March, the highest since 2008 after the Russia-Ukraine conflict escalated and exacerbated supply concerns. oil.

The possibility of the EU stepping up sanctions against Russia and its oil has added impetus to the increase in oil prices. The European Commission (EC) is expected to finalize discussions on the next package of sanctions against Russia, including a ban on buying Russian oil, by the end of May 3 (local time).

The market is also focusing its attention on the US oil supply and inventories report released by the American Petroleum Institute and the Energy Information Administration (EIA) on May 4. US crude inventories are estimated to have fallen by 1.2 million barrels for the week ending April 29, according to analysts polled by Reuters.